The chief executives of Microsoft and Cisco have been forced to publicly deny that increasing competition between the two companies will affect collaboration in new technology markets.

Microsoft is making a move into the unified communications market, which brings together voice, email and instant messaging.

Meanwhile, Cisco is expanding beyond its traditional market into applications such as video conferencing and TV set-top boxes, in competition with Microsoft.

But Microsoft chief executive Steve Ballmer and Cisco counterpart John Chambers said the firms will continue to collaborate in areas such as IT architecture, security, management, wireless and mobile, unified communications, connected entertainment and small and medium-sized businesses.

The main area of competition will be in the unified communications sector, said Ovum analyst Jan Dawson.

‘Cisco’s purchase of WebEx was the latest major salvo in this war, but the two companies are increasingly shaping up as the two major competitive forces in this market,’ he said.

‘But customers on the whole want to mix IP telephony infrastructure from Cisco or its competitors, and messaging software from Microsoft or its competitors. They do not want to be forced into an all-or-nothing approach from either vendor.’

Integration companies are increasingly calling for interoperability and putting significant pressure on Microsoft and Cisco, said Dawson.

‘Interoperability means following and driving industry standards, which will present an interesting challenge for the companies, both of whom have reputations as builders of proprietary systems first and foremost,’ he said.

‘The tension between seeking competitive advantage through proprietary technology and establishing interoperability through open standards will remain, and both companies will have to make tough decisions about where to draw the line.’